The announcement today may seem to prompt a yawn of payments boredom. It seems so simple, a QR code, that most would say, “big deal.” However it is the tremendous amount of work that needed to be done so that it all works in the real world that is the part that most of us can easily miss. It does not help when we assume that this is the “old PayPal.” It clearly is not.

"Today, we’re announcing yet another innovation that’s part of our payments roadmap with the introduction of payment code. This new technology will enable you to make purchases by scanning a QR code on your mobile phone, or receive a short four-digit code on your phone, to complete a purchase. Payment code is an extension of our offerings for enhancing the payments experience in-store.

Our approach isn’t to push technology for technology’s sake, but to truly make the paying experience better for consumers and to give merchants more opportunity to innovate without a costly investment. Payment code is easy to use and understand and utilizes a ubiquitous technology that merchants have and are familiar with.”- Don Kingsborough [1]

PayPal is moving fast to become a ubiquitous option at retail merchants. So much has changed in the last few months that the pace may be hard to follow. Today, PayPal is a revitalized company that is embracing empirical praxis and highly talented experience. The results are true innovation.

It is not popular at some payment startups to embrace empirical praxis. They have been wrongly informed to ignore history, people with real day to day merchant experience, and the Practical and Pragmatic merchant. Many times it was ill informed founders or Venture Capitalists that are fixated with a misunderstanding of true disruption. Heads down and iterate, they demand, you are a technology company, you don’t need lowly salespeople or to care about the way real world merchants really think.

In 2010, I tried to inform some payment startups that wanted to be the “PayPal of retail payments” that they would do well to understand that at some point PayPal would become the PayPal of retail payments, I was continuously told that this would “never happen.” The same payment startups are saying this about Apple and the Touch ID system, “oh that is just to secure the phone, no payment use” and iBeacons, “oh that's for location information only.” There are things they could do today to stay relevant, denial is not one of them. When history is written on why many of the current payment startups failed, it will be these reasons as the root causes.

The Rise Of The New PayPal

In the last 24 months, PayPal has transformed through a number of acquisitions and the fresh talent that came with these transactions. The leadership took a big step back and allowed the space for growth and what is now becoming a radical change at the company.

The image of the new PayPal can be seen by the example of David Marcus. You will not see David on the Charlie Rose show or morning network news shows talking about changing the world, you will find him actually working to really do it. David’s experience in payments spans all the way to the fact that he actually sold things to real merchants in his past.

Decades Of Payment Experience, Even As A CEO And Chief Salesperson

We can see the a great example of the new PayPal in the genius work of Don Kingsborough [2]. I wrote quite a bit about Don becoming a leader at PayPal a number of years ago on Quora, and the fruits of his work can be seen in many of the ways PayPal has chosen to work with rather than against merchant’s existing payment card relationships and procedures.

Don has been a driving force in payments for decades. At Blackhawk Network, he also took great pride in selling the solutions personally and directly to some of the largest retailers in the US. He went on to sell his multi-billion dollar company to SafeWay. Today, Don is doing the same thing with PayPal, and you can see just how great of a salesperson Don has been for the new PayPal vision. Don has personally sold some of the largest retailers in the US on the new PayPal. In my view, he has been a secret weapon.

It Takes More Time And Talent To Work With Existing Merchant Systems Than To Expect The Merchant To Just Throw Everything Away And Start At The Beginning

Today, Don introduced what deceptively seems to be just a rather boring and routine QR code displayed on the user's screen of a PayPal wallet based transaction. QR codes used in this manner are the basis of the most successful retail mobile wallet in the US, the Starbucks wallet. This aspect alone made the system very simple to deploy and scale at the thousands of Starbucks locations. It worked with and not against existing systems and procedures. Even Square had to adopt this technology in the Square Wallet to become compatible with the highly successful Starbucks created system.

The true innovation that PayPal achieved is really quite invisible and perhaps even boring to technologists. No iOS devices or android devices deployed at the merchant locations. No new add-ons needed, just the a boring Laser Bar Code scanner that every single major retail store already has.

Just a QR Code? This is part of a highly integrated system that works with just about any large retail merchant. This compatibility is a foundation for innovation.

“How does it work?

When you’re ready to pay, simply open the PayPal app (or the specific merchant’s app.) and check in. Once you’re checked-in at that location, the app prompts you with a QR code, or a four-digit short code, to authenticate your purchase.